india-ireland
Business Management

Ireland: A Destination for Indian Tech Companies?

Ireland has long offered tax incentives for foreign businesses and last year was awarded the top spot in Forbes’ Best Countries for Business list. John Kilmartin, Director of India, IDA Ireland, the agency responsible for development in the country, explains why he feels Ireland is an especially attractive destination for Indian companies.

Why are so many Indian companies attracted to working in Ireland?

Ireland has become a more competitive location since the downturn in the economy, with falling property and labour costs. This competitiveness is expected to continue following Ireland’s exit from the bailout. Ireland entered 2014 in a far stronger position than in recent years and that will bolster the country’s brand image, spurring additional interest from investors, in turn creating jobs in the economy.

 

What are the challenges faced by Indian companies wanting to enter Ireland and the EU?

Ireland is a pretty straightforward place to conduct business in. While setting up a company in Ireland, the registrations required to allow operations takes no more than three weeks.

 

How are Indian companies thriving compared to companies in Ireland?

Currently, 19 Indian companies have operations in Ireland. A few, like Ranbaxy and Wockhardt, have had a presence for a long number of years and continue to grow and expand as market conditions allow.

 

Some of India’s technology companies have found a home in Ireland over the recent years: HCL, Firstsource, Wipro, Synowledge. These companies have grown their headcount rapidly and when new business is acquired will continue to build their presence in Ireland. Ireland’s environment is very business friendly and allows [organisations] to flex their businesses based on market conditions.

 

What are the most notable cultural differences between Irish and Indian companies?

There are a lot of similarities between Indian and the Irish companies, particularly the way both have embraced technology. However, while Ireland’s technology companies generally concentrate on developing solutions for Business to Business (B2B), Indian companies are very services (BPO) driven. Although today, we see a large number of emerging technology product or platform companies with a focus on consumer (B2C).

 

How have you found the business landscape in India?

The business landscape in India has improved greatly in the time that I have been working in the Indian marketplace [four years]. The election result seemed to be generally embraced by businesses and there is a new sense of optimism particularly in the Indian domestic economy. You only need to look at the stock market to see evidence of that optimism. However, we have witnessed that Indian companies are also looking to grow in international markets.  

 

Can you describe the startup landscape across Ireland?

Ireland’s reputation as the Digital Capital of Europe is well-deserved; 10 of the top born-on-the-internet companies have operations in the country. Tech giants Google and Facebook have their international headquarters in Dublin, along with other big brand names such as LinkedIn, Twitter, PayPal, Amazon and Zynga.

 

Ireland provides companies with a strategic base from which they can achieve their global vision.  It acts as a bridge to both Europe and the USA.  The supportive and well-connected ecosystem helps companies scale up and internationalize quickly.  Some of India’s largest and best known companies have availed of these advantages including HCL, Wipro, Wockhardt, Reliance, Ranbaxy, Crompton Greaves, Tata Consultancy Services,  Firstsource, Aditi Technologies and Synowledge.

 

Is there anything else you want to share about tech and business in Ireland through your work with IDA?

IDA Ireland is responsible for attracting foreign direct investment into Ireland, we assist companies through the set-up stage in Ireland and beyond to ensure companies have a successful experience.  Our success is evident with eight of the top ten global tech enterprises running significant operations in Ireland as well as many start-ups; 40% of new jobs created last year in Ireland were at companies less than five years old.  There were more than 70 first-time investors in Ireland in 2013 including Qualcomm, Airbnb, TripAdvisor, Adroll, Nitro, Aditi Technologies and Synowledge.  Many of the big names in tech have set up home in Dublin’s Grand Canal Docks known colloquially as Silicon Docks - it is home to companies such as Google and Facebook. 

 

Six of the top ten companies on Forbes magazine’s list of The World’s Most Innovative Companies 2014 have Irish operations, with Salesforce.com coming in at number one. Two fully Irish companies also made it onto Forbes’ list of The World’s Most Innovative Companies 2014 – Perrigo and Experian. 

 

Over the last two years IDA Ireland has targeted early stage, fast growth companies to Ireland. This has been a deliberate strategy which is paying dividends for both the companies and Ireland. Examples include well established names such as Airbnb and Etsy.

 

Other fast-growing companies that have recently set up include MongoDB, Squarespace, Zendesk, Hubspot, Qualtrics and Marketo. For many of these, speed to market is of the essence and Ireland's business friendly environment offers a compelling solution in a multicultural English speaking location. Ireland’s cadre of senior and middle management with experience of project delivery is proving to be a differentiating competence in a highly competitive market for top talent.

 

Do you have any comment on the tax allegations surrounding Apple?

Ireland is confident that there is no breach of State aid rules, in this case, the Irish government has already issued a formal response to the Commission, addressing in detail the concerns. Ireland welcomed that opportunity to clarify important issues about the applicable tax law, and to explain that the company concerned did not receive selective treatment and was taxed fully in accordance with the law. In the case of Ireland, the Commission is focussed on advance opinions provided to a company a number of years ago which address the calculation of the taxable base of profits of this company.  The enquiry relates to a technical tax issue in respect of this one company and does not relate to Ireland’s corporation tax rate or the Irish corporate tax system more generally.

 

How do you think the issue of technology companies and tax is likely to impact Ireland in future?

Ireland will continue to maintain a very competitive tax regime, whatever international reforms are being considered. But taxation is just one factor in winning investment from the world’s leading tech investors. The recruitment of talent and the existing cluster of tech companies in Ireland is also vital. Companies make investment decisions across a whole range of criteria, of which tax is just one. However, Ireland’s 12.5% tax rate is here to stay and no international body has sought to undermine the rate, it is a central pillar of Ireland’s industrial policy and will remain so.

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